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Friday, Telsey Advisory Group adjusted its outlook on Leslie’s (NASDAQ:LESL) shares, reducing the price target from $3.00 to $1.25 while maintaining a Market Perform rating. The firm’s analyst Dana Telsey cited ongoing challenges in the macro environment and uncertain trends leading into the pool season as the primary reasons for the adjustment. The stock, currently trading at $0.70, has experienced an 86.5% decline over the past year, according to InvestingPro data.
The analyst expressed cautious optimism regarding the strategic initiatives and communication from Leslie’s management team. However, the lack of clear indicators of a market recovery and consistent top-line growth has led to a more conservative stance. The revised price target reflects a decrease of $1.75 and is based on a 7.5x EV/EBITDA multiple applied to the updated fiscal year 2026 adjusted EBITDA projection of $131 million. InvestingPro analysis shows the company’s current EV/EBITDA ratio stands at 14.76x, with revenue declining by 6.12% in the last twelve months.
Leslie’s, a prominent player in the pool supplies and maintenance industry, faces a difficult macroeconomic landscape that has been affecting consumer spending patterns. This environment has prompted Telsey’s decision to reassess the company’s financial outlook for the coming year. According to InvestingPro data, while the company maintains strong liquidity with a current ratio of 1.56, it reported a negative return on assets of -4.22% in the last twelve months. Get access to 12 additional InvestingPro Tips and comprehensive financial analysis through the Pro Research Report.
The Market Perform rating indicates that the analyst believes Leslie’s stock will perform in line with the broader equity market over the next 12 months. This neutral stance suggests that Telsey does not foresee significant stock movement in either direction based on the current information available.
Investors and stakeholders in Leslie’s are now equipped with Telsey’s latest expectations for the company’s financial performance. The new price target of $1.25 sets a revised benchmark for Leslie’s market valuation as it navigates through the upcoming pool season and beyond.
In other recent news, Leslie’s Inc. reported its financial results for the second quarter of 2025, showing a decline in revenue and a slight miss on earnings expectations. The company posted an earnings per share (EPS) of -$0.25, which did not meet the forecasted -$0.24. Revenue was reported at $177.1 million, falling short of the anticipated $184.88 million, marking a 6% decrease compared to the previous year. Despite these challenges, Leslie’s reaffirmed its full-year guidance, maintaining confidence in its strategic initiatives aimed at debt reduction and inventory optimization.
The company is also focusing on strengthening its Pro segment and enhancing its omnichannel strategy. Leslie’s has implemented local fulfillment centers (LFCs) to improve inventory management and customer service, with all 26 LFCs now operational. Additionally, Leslie’s has partnered with Uber (NYSE:UBER) to launch same-day delivery services, aiming to enhance convenience for both Pro and DIY customers. These efforts are part of the company’s broader strategy to improve asset utilization and customer experience.
Leslie’s continues to face challenges such as unpredictable weather patterns impacting sales and intense market competition. However, the company is leveraging strategic investments and new marketing initiatives to drive growth and improve financial performance. Interim CFO Tony Iskander emphasized the importance of cost optimization, with plans to achieve annualized cost savings of approximately $5 million to $10 million, primarily within indirect procurement costs.
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